"Where is the unsubscribe button?"... US FTC cracks down on corporate tricks

Adopting Rules to Make Subscription Cancellation Easier After Sign-Up

From now on, American companies must establish systems that allow consumers to easily cancel subscription and membership services. This is because U.S. competition authorities have cracked down on the practices of some companies that have devised various tricks to prevent subscription cancellations.

On the 16th (local time), the Federal Trade Commission (FTC) announced that it had adopted a final rule requiring companies to simplify the cancellation of subscription and membership services. The main point is that companies must build systems that allow consumers to cancel subscription and membership services with just one click.

The FTC targeted subscriptions and membership services that automatically renew unless consumers take cancellation actions. Going forward, companies must provide prior notice to consumers about recurring payments related to subscriptions.

Additionally, companies are prohibited from requiring consumers who subscribed through apps or websites to go through chatbots or customer service representatives to cancel subscriptions. Also, if consumers must cancel subscriptions by phone, companies must ensure that cancellations can be processed during business hours.

The FTC warned that companies violating this rule may be subject to civil fines.

FTC Chair Lina Khan explained the purpose of adopting the rule, saying, "It is a response to the fact that subscribing to services is extremely easy, but canceling them is unreasonably difficult." She emphasized, "Companies should not deceive customers into paying for subscriptions they do not want."

Publishers, advertising agencies, and video game companies have opposed this rule, which was proposed last March, calling it "double regulation." According to The Wall Street Journal (WSJ), several U.S. states are already enforcing regulations related to subscription cancellation procedures.

This content was produced with the assistance of AI translation services.